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2018.02.2002:22:00UTC+00Gold Prices Drop for the 3rd Day as Dollar Rebounds from Dec 2014-Lows

Gold prices dropped for the third consecutive session on Tuesday as the dollar bounced back from more than three-year lows notched the previous week. Investors currently await the minutes of the latest Federal Reserve meeting for indications on the outlook for U.S. interest rates.

Spot gold fell 0.4 percent to $1,341.20 per ounce. Earlier, it dropped to as low as $1,340.16, the weakest since Feb. 14.

U.S. gold futures were one percent lower at $1,342.90 per ounce, posting its biggest one-day decline in almost two weeks.

The dollar index which measures the greenback against a basket of six currencies, increased 0.3 percent to 89.397. It dropped to 88.253 last week, the weakest since December 2014.

The U.S. currency showed signs of a rebound as some investors bought in after last week's declines, although the gains on Tuesday were capped by growing concerns that a rising fiscal deficit in the United States could disrupt the economy.

Gold prices rose 2.4 percent last week in its best weekly gain in more than five months, as investors bought gold on fears of rising inflation in the United States.

Spot gold is expected to test a support at $1,338 per ounce, with a good chance of breaking below this level and falling more to the next support at $1,326, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver fell 0.6 percent to $16.57 an ounce. Palladium dropped 0.4 percent lower to $1,028.65, after rising to its highest since Feb. 2 at $1,050 in the previous session. Platinum was down 0.1 percent at $1,001.24, after climbing to a three-week high on Monday at $1,013.60.

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